Sugar prices in the US have fallen more than 40% since last summer and are now at “dangerously low levels for producers who are facing ever-increasing input costs”, according to Jack Roney, an economist with the American Sugar Alliance (ASA).

Roney, writing in the association’s Sugar Beet newsletter, claims surplus stocks are suffocating the sugar market, owing to a combination of strong domestic production and “excessive imports triggered by a controversial USDA decision to boost supplies earlier this year”.

The surplus is bad news for overseas farmers, too, since the US is the world’s biggest sugar importer, he argues:

“In fact, the government of the Philippines recently announced it would delay a large sugar shipment to America in hopes of better prices down the line.”

According to USDA, producer prices for refined sugar fell another 4% in November, with two million tons of excess sugar currently overhanging the market.

US raw sugar prices are now in line with artificially low prices on the global dump sugar market

While US bakers and confectioners argue that they pay over the odds for sugar, making them less competitive and sending food manufacturing jobs overseas, the ASA claims candy makers pay less for sugar than counterparts in other developed countries, and have grown sales during the recession.

When you factor in transportation costs, US raw sugar prices “are now in line with artificially low prices on the global dump sugar market, which has been called the most distorted and depressed commodity market in the world”, claims Roney.

NCA: Reform of the archaic US sugar program is vital for candy companies across the US

However, the National Confectioners Association (NCA) argues that the US sugar program, which sets import quotas on sugar, enforces a minimum price for sugar in the US market, limits how much US sugar processors can sell, and forces USDA to buy surpluses and sell them to ethanol refineries, means US sugar prices are artificially high.

According to the Coalition for Sugar Reform, an alliance of food and beverage manufacturers and other groups, the sugar program (as outlined in the 2008 Farm Bill), reduced access to imports and distorted markets, causing sugar prices to spike to record highs in 2010 and 2011.

Artificially high prices in turn created an incentive for domestic growers to produce more sugar crops, explaining the current surplus, it claims.

“With supplies on the rise in both Mexico and the US, US refined sugar prices have fallen to around 32-34 cents per pound — still higher than the 28-cent average under the 2002 Farm Bill and roughly 50% higher than the world price. “

Speaking to FoodNavigator-USA earlier this week, NCA senior vice president communications and outreach Susan Smith said the NCA’s top lobbying priority next year is reform of the sugar regime.

She added: “Reform of the archaic US sugar program is vital for candy companies across the US.”

The American Sugar Alliance is a national coalition of sugarcane and sugar beet farmers, processors, refiners and suppliers.

This content is copyright protected

However, if you would like to share the information in this article, you may use the headline, summary and link below:

Sugar prices in the US have fallen more than 40% since last summer and are now at “dangerously low levels for producers who are facing ever-increasing input costs”, according to Jack Roney, an economist with the American Sugar Alliance (ASA).

Technical / white paper

26-Mar-2015 - “Simplifying Sweetness” is an unprecedented segmentation study of 15,000 consumers. Commissioned by the Corn Refiners Association and completed in part by Nielsen and Mintel Consulting, this study compares consumer sentiment toward sweeteners to actual purchase data, to see if consumer...

Technical / white paper

17-Mar-2015 - Inflammation affects heart health, arthritis and many other health issues – and growing evidence suggests that nutrition is part of the solution. Seize this opportunity with custom nutrient premixes.Any nutrient. Any application. Anywhere in the world.

Data sheet

24-Feb-2015 - The 2015 Sweetener360: Are You Marketing to Buzz or Behavior?With over 15,000 consumers surveyed, we’ve validated our findings from 2014—what consumers say and what they do don’t always align. Take a look at the 2015 Sweetener360 SlideShare deck for these...

Technical / white paper

19-Feb-2015 - The days of having to choose between flavour impact or processing ease for your menthol products are over! StabilisedMentholPlus is the next generation in menthol flavouring for chewing gum and confectionery.TasteTech have solved the problems associated with processing menthol crystals by developing...